Wednesday, January 21, 2015

Domestic use of LNG economical : Expert:

An expert from the Petroleum sector has expressed satisfaction over the recent agreement between the Government and ExxonMobile PNG to supply gas for electricity in the country.

"Exporting all future PNG gas extract for income may not be the best use of this remarkable resource. LNG should also be used for domestic power consumption and petrochemical feedstock to boost industry and provide much-needed jobs," argues petroleum operations advisor to the World Bank, Michael McWalter in his recent article on the Latest Edition of Profile.

He said, "The PNG LNG Project is a great achievement, the project leaders have turned remote, distressed and valueless gas resources into commercially viable and producing gas reserves aimed at the energy deficient markets of East Asia where customers are prepared to pay a premium for LNG delivered to their shores.

Those lessons are reflected in the pragmatism and patience exercised throughout the gestation of the project by political figures, landowners, ExxonMobil executives and customers, like the Japanese. Thus if is important to engaging first-class local staff and learning so much about our society, ExxonMobil has become part of PNG.

He further stressed that with more LNG projects in the pipeline, it is timely to consider how to develop those fields, and get the best value from their output.

He estimated that the country’s first LNG Project will produce about 9.5 trillion standard cubic feet of gas over its life.

He said there may probably be another 30 trillion standard cubic feet to develop and proven reserves amount to about 20 trillion standard cubic feet. "So firstly, we need a new stocktake of the petroleum resources and reserves to be undertaken by the Government, preferably with the help of the various licensees and experienced assessors. We can then make better assessment of what do to with the gas.

"Future gas production need not necessarily be solely for export and cash revenues. While we can obtain an excellent premium value for gas sold as LNG to energy hungry markets, we might also be able to accumulate just as much value if the gas is used as petrochemical feedstock for petrochemical projects at home and feeding that output into much needed industrial activity.